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Facebook hit with two antitrust lawsuits

It's the most aggressive action against a major tech company in decades.

The Federal Trade Commission and a coalition of 48 attorneys general filed two sweeping lawsuits against Facebook on Wednesday, alleging the company has abused its enormous power to stifle competition and maintain its position as the dominant social networking platform.

It's the most aggressive action against a major tech company in decades, and it could ultimately result in the complete breakup of Facebook if the government has its way.

The FTC said it is seeking a permanent injunction in federal court that could require Facebook to unwind its Instagram and WhatsApp mergers, shocking even close industry watchers who didn't expect the government to go that far. "Personal social networking is central to the lives of millions of Americans," said Ian Conner, the director of the FTC's Bureau of Competition. "Facebook's actions to entrench and maintain its monopoly deny consumers the benefits of competition. Our aim is to roll back Facebook's anticompetitive conduct and restore competition so that innovation and free competition can thrive."

New York Attorney General Letitia James, who is leading the coalition of states in their suit, said states are asking the court to "halt Facebook's anti-competitive conduct" and "provide any additional relief it determines is appropriate, including divestiture of illegally acquired businesses and/or Facebook's assets."

The cases from the FTC and states were announced simultaneously and both contain similar allegations. They were both filed in the Washington, D.C., federal court and will likely be consolidated into one lawsuit further down the line.

They both allege that Facebook violated antitrust law with its acquisitions of Instagram and WhatsApp, and call for an end to its unfettered acquisition of smaller companies and potential rivals.

Facebook in a statement accused the government of calling for a "do-over" after the FTC cleared its acquisitions of Instagram and WhatsApp in 2012 and 2014, respectively.

"We're reviewing the complaints & will have more to say soon," Facebook said. "Years after the FTC cleared our acquisitions, the government now wants a do-over with no regard for the impact that precedent would have on the broader business community or the people who choose our products every day."

The Facebook antitrust case will likely become ensnared in the courts for years as the social media behemoth and government lawyers battle over whether Facebook harmed consumers and distorted the market as it became arguably the most popular social networking site in the world.

The FTC and state attorneys general both quote extensively from Mark Zuckerberg himself, who wrote in a 2008 email, "It is better to buy than compete," according to the FTC.

Update: This article was updated at 12:30 p.m. PT with Facebook's response.


Yes, GameStop is a content moderation issue for Reddit

The same tools that can be used to build mass movements can be used by bad actors to manipulate the masses later on. Consider Reddit warned.

WallStreetBets' behavior may not be illegal. But that doesn't mean it's not a problem for Reddit.

Image: Omar Marques/Getty Images

The Redditors who are driving up the cost of GameStop stock just to pwn the hedge funds that bet on its demise may not be breaking the law. But this show of force by the subreddit r/WallStreetBets still represents a new and uncharted front in the evolution of content moderation on social media platforms.

In a statement to Protocol, a Reddit spokesperson said the company's site-wide policies "prohibit posting illegal content or soliciting or facilitating illegal transactions. We will review and cooperate with valid law enforcement investigations or actions as needed."

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Issie Lapowsky
Issie Lapowsky (@issielapowsky) is a senior reporter at Protocol, covering the intersection of technology, politics, and national affairs. Previously, she was a senior writer at Wired, where she covered the 2016 election and the Facebook beat in its aftermath. Prior to that, Issie worked as a staff writer for Inc. magazine, writing about small business and entrepreneurship. She has also worked as an on-air contributor for CBS News and taught a graduate-level course at New York University’s Center for Publishing on how tech giants have affected publishing. Email Issie.
Protocol | China

More women are joining China's tech elite, but 'Wolf Culture' isn't going away

It turns out getting rid of misogyny in Chinese tech isn't just a numbers game.

Chinese tech companies that claim to value female empowerment may act differently behind closed doors.

Photo: Qilai Shen/Getty Images

A woman we'll call Fan had heard about the men of Alibaba before she joined its high-profile affiliate about three years ago. Some of them were "greasy," she said, to use a Chinese term often describing middle-aged men with poor boundaries. Fan tells Protocol that lewd conversations were omnipresent at team meetings and private events, and even women would feel compelled to crack off-color jokes in front of the men. Some male supervisors treated younger female colleagues like personal assistants.

Within six months, despite the cachet the lucrative job carried, Fan wanted to quit.

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Shen Lu

Shen Lu is a Reporter with Protocol | China. She has spent six years covering China from inside and outside its borders. Previously, she was a fellow at Asia Society's ChinaFile and a Beijing-based producer for CNN. Her writing has appeared in Foreign Policy, The New York Times and POLITICO, among other publications. Shen Lu is a founding member of Chinese Storytellers, a community serving and elevating Chinese professionals in the global media industry.

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